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I N T E R C O N T I N E N TA L A M B A S S A D O R
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©2016 IHG Confidential
THE AMBASSADOR REFRESH
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©2016 IHG Confidential
AMBASSADOR IS PART OF THE INTERCONTINENTAL BRAND’S HERITAGE
1966 1998 2004 2009 2013 2014
InterContinental Hotels Corp creates Six Continents Club
Ambassador is re-launched to
align more closely with the
InterContinental brand
Ambassador celebrates 10 years!
Bass PLC purchases
InterContinental Hotels Corp
Six Continents Club becomes
Ambassador and aligns with Priority
Club Rewards
Six Continents Club InterContinental Ambassador
IHG®
Rewards ClubPriority Club®
Rewards
2016
Ambassador refresh project
begins
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“Ambassador is steeped in history, it originated
from Six Continents Club which was launched in 1966 as the first ever loyalty programme”
“Ambassador gives members an enhanced InterContinental brand experience, to feel that
they are part of an exclusive club”
“Members see the value, which drives
renewal”
“Status, recognition & affirmation are all
key emotional needs” “Ambassador members show clear incremental
value compared to other guests”
©2016 IHG Confidential
NOW WE WANT TO BUILD ON OUR STRENGHS TO MAKE AMBASSADOR EVEN BETTER
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“We have to try and stick to consistent delivery. If we move away from that…we’re only creating problems for other properties.”
“Ambassadors don’t feel special anymore. They feel like everyone else.”
©2016 IHG Confidential
WE ALSO NEED TO ADDRESS OUR OPERATIONAL CHALLENGES
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Focus on targeted
enrolment of high value
guests
Alignment with the
InterContinental brand guest experience
Alignment with InterContinental brand strategy
Royal criteria based on
revenue not just stays
Ensure incremental
revenue and a positive ROI for
hotels
Greater consistency and
hotel compliance
©2016 IHG Confidential
WE ARE REFRESHING AMBASSADOR BASED ON KEY GUIDING PRINCIPLES
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InterContinental Ambassador Programme
A paid for extension of IHG Rewards Club designed for high value members that gives exclusive benefits & iconic service to drive brand
loyalty and ADR in InterContinental Hotels & Resorts
InterContinental Royal Ambassador
Complimentary exclusive privileges, by invitation only, for our most valuable Ambassador members to drive brand loyalty and ADR in
InterContinental Hotels & Resorts
©2016 IHG Confidential
AND WE HAVE DEFINED THE ROLE AND PURPOSE OF THE AMBASSADOR PROGRAMME
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©2016 IHG Confidential
THE AMBASSADOR VALUE STORY
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©2016 IHG Confidential
Cost*Revenue
ADR
Non-Room
F&B
+
_ Profit
+
=Direct Cost
Opportunity Cost+
Non-Ambassador*
Ambassador
Royal
1 Calculated profit metrics by hotel by member tier
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Non-AmbassadorProfit
Ambassador Value
AmbassadorProfit
Incremental Program Value
_ Non-AmbassadorProfit
Royal Value
RoyalProfit
_
+
Compared Ambassador and Royal profits to Non-Ambassador
*Direct costs include F&B benefit, points cost, cost to turn room. Indirect costs include opportunity cost of upgrade benefit delivery
THE OBJECTIVE OF OUR ANALYSIS WAS TO EXAMINE PROGRAMME VALUE
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©2016 IHG Confidential
Incremental Indirect ProgramImpactADR $246M
Non-room $26M
Cost to serve
($93M)
Profit $ $179M
TOTAL PROFIT/YEAR PER MEMBER
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
Typical IHGGuest
IncrementalAmb Guest
Total AmbValue
$2K
$660
$5.8K
IHG Rewards
Club
Ambassador Royal
Source: 2013 IHG RC and Ambassador transaction data; Aimia analysis
Ambassador generates over $170M in incremental profit to InterContinental Hotels & Resorts.
Ambassador members generate 3x more profit than IHG Rewards Club members
PROFIT SLIDE
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©2016 IHG Confidential
$1,746
$3,087
$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
Pre-Ambassador Post Ambassador
ANNUAL PROFIT PRE VS. POST
5.8
9
0
1
2
3
4
5
6
7
8
9
10 Pre vs. Post Nights+77%
Largest factor
NIGHTS STAYED BEFORE AND AFTER ENROLLMENT
$0
$50
$100
$150
$200
$250
$300
$350
$400
Pre-Ambassador Post Ambassador
ADR + NON-ROOM REVENUE/NIGHT
ADRNon-room spend
$301
$343+55%
+14%
Pre-Ambassador Post Ambassador
Source: 2013 IHG RC and Ambassador transaction data; Aimia analysis
JOINING AMBASSADOR IS SHOWN TO CHANGE GUEST BEHAVIOUR
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©2016 IHG Confidential
…LEADING TO LARGE INCREMENTAL PROFITS FOR
THE ENROLLING HOTEL
$1,850
$3,100
$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
Avg. Ambassador Enrolled Ambassador
Incremental Profit
6
10
0
2
4
6
8
10
12
Average Nights
+70%$358$367
$0
$50
$100
$150
$200
$250
$300
$350
$400
ADR + Non Room Revenue/Night
ENROLLED AMBASSADORS SHOW A SMALL UPLIFT IN
NIGHTLY REVENUE…
…BUT THEY STAY SIGNIFICANTLY MORE
NIGHTS…
ADRNon-room spend
Avg. Ambassador
Enrolled Ambassador
Enrolling guests is the best way to increase your profits via this program
Avg. Ambassador
Enrolled Ambassador
Ambassadors enrolled by a specific hotel lead to 70% higher value for that hotel
Source: 2013 IHG RC and Ambassador transaction data; Aimia analysis
ENROLMENTS ARE IMPORTANT – AND BENEFICIAL TO HOTELS
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©2016 IHG Confidential
84%
16%
0%
20%
40%
60%
80%
100%
*Enrollees are identified as those who London Park Lane enrolled onsite Source: 2013 by InterContinental hotel Ambassador enrollment data Aimia analysis
REVENUE FROM LONDON PARK LANE ENROLLEES
($M)*
SYSTEM VALUE FROM ENROLLED GUESTS IS
IMPORTANT
• Enrolling members contribute a significant amount of value to other InterContinental hotels
• At London Park Lane:o 16% of the revenue from
enrollees went to other InterContinental hotels
o ~70% of that revenue (of the $1.2M) goes outside the region
ENROLLEES GENERATE VALUE OUTSIDE OF
LONDON
$7.3M $1.2M
14%
54%
31%
1%
Greater China
Europe
AMEA
Americas
Other InterContinental LocationsLondon Park Lane
Case Study
NEW ENROLEES HELP THEIR HOTELS BUT ALSO SUPPORT OTHER PROPERTIES
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©2016 IHG Confidential
WORK IN PROGRESS
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©2016 IHG Confidential
Opportunity• Ambassador benefits have a high perceived value amongst
members but are inconsistently delivered on property• There is an opportunity to deliver more personally relevant
benefits
Actions• Clear definition and communication of upgrade policy and Club
Lounge access policy• Upgrade email communications for members• In room F&B choice (fruit, sweet or savoury snack)
MEMBER BENEFITS
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©2016 IHG Confidential
Opportunity
• Royal Ambassador initiations should only be given to our highest value members
• Royal Ambassadors already deliver $27M incremental profit globally but their ADR is lower than that of Ambassador members
• Current criteria is based on stays not spend• Adjusting the criteria will focus on our highest value guests
Actions
• New Royal selection criteria is based on revenue not just stay behaviour
• Only InterContinental stays will count towards Royal qualification
• Multi location stays to avoid qualification for long term stayers• Changes will be phased in
ROYAL AMBASSADOR CRITERIA
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©2016 IHG Confidential
Opportunity
• Ambassador is linked to both IHG Rewards Club and the InterContinental brand
• Alignment of Ambassador with the new IHG Rewards Club brand while demonstrating the connection with InterContinental Hotels & Resorts
Actions• A new look and tone of voice for Ambassador to reflect its
positioning as a Rewards Club extension for the upscale and luxury sector – returning to the glamour of the InterContinental Life
NEW INTERCONTINENTAL AMBASSADOR IDENTITY
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For our members For our hotels
Consistent benefit delivery
More personalisation
New look and feel
Alignment with InterContinental brand goals
Focus on driving ADR
Targeting our high value guests – from new members
to Royals
For our owners
Driving our highest value guests to their hotels
Delivering a positive ROI
Improving Royal ROI
©2016 IHG Confidential
IN SUMMARY: AMBASSADOR IS CHANGING
We’ll be telling you more about the Ambassador refresh over the coming months as we work on making
Ambassador the best it can be for our members and hotels.
©2016 IHG Confidential
WHAT NEXT?
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THANK YOU
©2014 IHG Confidential 20
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